Asset Allocation Strategy
Emerging Market Equities: Checking in on our Positive View
Mon 23rd November, 2020

In May this year, we outlined the bullish case for emerging market equities (EM). In this week’s asset allocation view we check in on our positive view and outline the factors behind our overweight position:

  1. Superior virus control in the key North Asia region (China in particular) with resulting potential for a faster near-term economic recovery than in the developed world.
  2. Significant leverage to a medium-term global economic recovery as growth rebounds in 2021 and 2022.
  3. Strong secular (5 years +) growth potential beyond the near-term cyclical rebound driven by relatively better demographics, superior productivity gains, and growing addressable markets.
  4. More attractive valuations relative to developed market equities.
  5. A likely tail-wind for EM from progressive US$ depreciation.

Disclaimer and disclosures

Recommendation structure, definitions and the Financial Services Guide (“FSG”) can be found at www.wilsonsadvisory.com.au/disclosures.

Disclaimer

This document has been prepared by Wilsons Advisory and Stockbroking Limited (AFSL 238375, ABN 68 010 529 665) (“Wilsons”) and its authors without consultation with any third parties, nor is Wilsons authorised to provide any information or make any representation or warranty on behalf of such parties. Any opinions contained in this document are subject to change and do not necessarily reflect the views of Wilsons. This document has not been prepared or reviewed by Wilsons' Research Department and does not constitute investment research. Wilsons makes no representation or warranty, express or implied, as to the accuracy or completeness of the information and opinions contained therein, and no reliance should be placed on this document in making any investment decision. Any projections contained in this communication are estimates only. Such projections are subject to market influences and contingent upon matters outside the control of Wilsons and therefore may not be realised in the future. Past performance is not an indication of future performance.

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Written by

David Cassidy, Head of Investment Strategy

David is one of Australia’s leading investment strategists.

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